April 16, 2015

Yahoo and Microsoft have agreed to extend their search partnership with some key changes: an improvement in the search experience, more value for advertisers and increased stability for partners.

According to the terms of the partnership, Yahoo will now have increased flexibility to enhance the search experience on any platform because the partnership is non-exclusive for both desktop and mobile.

CEO Satya Nadella takes questions from the audience at Build in San Francisco, where he spoke about developing for Windows, Microsoft’s product strategy and the company’s future.

It is a change Yahoo CEO Marissa Mayer had been pushing for — and one Microsoft CEO Satya Nadella ultimately had to agree to in order to keep the partnership alive.

“Over the past few months, Satya and I have worked closely together to establish a revised search agreement that allows us to enhance our user experience and innovate more in our search business,” Mayer said in a press release. “This renewed agreement opens up significant opportunities in our partnership that I’m very excited to explore.”

Yahoo will also continue to serve Bing ads and search results for a majority of its desktop search traffic.

Another change is that Microsoft will become the exclusive salesforce for ads delivered by Microsoft’s Bing Ads platform. Yahoo, meanwhile, will continue to be the exclusive salesforce for Yahoo’s Gemini ads platform. The sales teams will be integrated with those responsible for engineering to permit both companies to better service advertisers. The change will begin this summer.

“Our global partnership with Yahoo has benefited our shared customers over the past five years and I look forward to building on what we’ve already accomplished together,” Nadella said. “Our partnership with Yahoo is one example of the diverse partnerships we’ll continue to cultivate in order to have the greatest impact for our customers.”

Microsoft and Yahoo signed a 10-year deal in 2009, agreeing Microsoft’s Bing search engine would power searches across both companies’ Web properties.

The deal had been causing friction between the two technology companies for some time.

The terms of the deal allowed Yahoo and Microsoft to re-examine it at its halfway point — which was in February — with 30 days set aside for negotiation. The companies agreed to a new deadline of April 24, which has been met by the new deal.